Crypto-Focussed Bank Silvergate Reports Q4 Loss of $1B

Silvergate Capital (SI), the crypto-focussed bank, reported net loss attributable to shareholders of $1 billion for the three months-ended Dec. 31, 2022.

The loss figure compares to net income of $18 million for the equivalent quarter in 2021 and net income of $40.6 million for the previous quarter. The losses in Q4 culminated to full-year losses of around $949 million, compared to net income of $75.5 million in 2021.

Silvergate's results for the quarter were foreshadowed at the start of January when the firm said it saw an outflow of $8.1 billion during Q4 and that it had slashed 40% of its staff. In relation to the workforce reduction, the firm expects to incur restructuring charges of $8.1 million, the majority of which it will pay this quarter.

Furthermore, Silvergate recorded a $134.5 million impairment charge related to around $1.7 billion of securities it expects to sell this quarter as it attempts to counter the huge outflows witnessed at the end of last year.

As with all other major cryptocurrency firms, Silvergate was rocked by contagion from the collapse of crypto firms last year which brought a significant downturn in the industry, coming to a head in November with the collapse of FTX.

At the time of writing, Silvergate shares on the New York Stock Exchange were up 4.92% at $13.85 in pre-market trading, while bitcoin (BTC) was up 1.7% at $21,235.

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